The Republic of Palau is an archipelago of Islands with an 18K population. The republic was annexed to the United States in 1947 as Trust Territory of the Pacific Islands. Therefore, the country has no central bank and no native fiat currency. However, the political leadership of Palau has partnered with Ripple Labs to issue its first-ever CBDC.
Ripple Labs has been signing deals left and right with several countries around the world to become the next fintech innovator and technology trendsetter. However, the company is still facing charges of fraudulent trading from the Securities and Exchange Commission of the USA in the federal court.
Cross-Border Payments Method
The representatives of Ripple Labs have issued an official announcement on Tuesday that it is working with the Palau Republic officials for generating a cross-border payment system. The spokesperson further added after the successful completion of the contract, Palau will become the first nation in the world to issue a state-backed stablecoin in the region.
President of Palau, Surangel Whipps Junior, has claimed that he is happy and excited about the new partnership. He also commented on the advantages of blockchain technology for the financial and economic development of the region. James Wallis, VP of the Central Bank Engagement at Ripple, claimed that the partnership allowed the company and the government to create a wonderful project and study the impact of the new stablecoin on the economy and financial infrastructure of the region.
The native token called XRP that is now associated with XRP Ledger, used the proof-of-stake consensus model that requires very little energy input in comparison to the PoW model. Keeping in view the energy crisis and the problem of massive carbon footprint generated from crypto mining, Ripple had started a new zero-carbon initiative last year.
As a result of this initiative, the company has created the EW zero protocol. The first blockchain to incorporate this protocol was XRP Ledger. Furthermore, Bhutan, the only carbon-negative organization in the world, has also partnered with Ripple Labs to create its first CBDC this year.